By Katherine J. Hart

In California Native Plant Society v. County of El Dorado (2009) 170 Cal.App.4th 1026, the California Native Plant Society (“Society”) filed a CEQA lawsuit against El Dorado County (“County”) after the County approved a Mitigated Negative Declaration (“MND”) and Congregate Care Project (“Project”).  The Project consists of two care units, cottages, and a clubhouse on 20 acres, and was part of a larger development area including a local medical center, a senior assisted living facility, medical office buildings and a local retail shopping center.

The Project was to be located on acreage adjacent to the Cameron Park unit of the Pine Hill Preserve, which is made up of a total of five separate units of protected land within the County. Environmental consultants for the Project identified a number of “special status species” on the Project site including, the morning glory and the ceanothus. Mitigation for the Project included: 1) establishing a 0.385 acre morning glory preserve; 2) transplanting four existing morning glory plants found on the project site to a new preserve; 3) collecting and treating seeds to foster new plant growth; and 4) paying a $135,000 mitigation fee established by a County ordinance in 1998 (“The Ecological Preserve Fee Program” or “Ordinance”). The County’s CEQA plant focus was on state and federally listed morning glory, but not the federally-only listed ceanothus.  The County approved the use of the negative declaration in part based upon the existence of the fee program.

The County’s Fee Program allowed applicants developing land containing specified species (including morning glory and ceanothus) within the Rare Soils Area the option to pay a mitigation fee in lieu of on-site mitigation. The Fee Program further provided that the County would review the fee on an annual basis and adjust the fee as necessary. No CEQA review of the Ordinance was conducted by the County when it was adopted, and the County had never adjusted the fee since its enactment in 1998.

In 2004, the County adopted a new General Plan. The General Plan EIR, a programmatic document, discussed the creation of the Preserve Program. It contained policies stating that the County must provide for permanent protection of eight sensitive plant species (including the ones at issue in the Project) through the establishment of the Preserve Program and a fee program. It also stated the Fee Ordinance did not cumulatively avoid significant environmental impacts to the rare plant species at issue and that mitigation should be defined in a management plan, which was never adopted by the County.

As the Project was being processed, biologists from both the USFWS and the Society testified before the County Planning Commission and Board of Supervisors that they had concerns regarding the insufficiency of the proposed mitigation (e.g., transplanting the morning glory plants and only a 1/3-acre area designated for a new preserve) and the lack of mitigation for the ceanothus. Furthermore, it was noted by a representative of the USFWS that “because of the location of the proposed project, if developed, it will permanently fragment the existing connection between these areas of protected preserve lands.” The Recovery Plan included text indicating that fragmentation and edge uses posed significant challenges to successful species protection. The interested agencies also provided testimony that transplanting had not progressed to the point where it was considered to be an acceptable strategy. The Pine Hill Preserve manager submitted comments suggesting alternative onsite mitigation approaches in lieu of fee payment. Accordingly, a new set of mitigation measures were agreed upon, including paying the in-lieu fee, donating six-acres of land via boundary line adjustment and replanting all of the ceanothus plants. 

At the Board of Supervisor’s meeting, concerned groups testified to a number of issues including that the Project’s impacts to the endangered plants were not adequately analyzed.  One of the points of discussion and debate was the effect of the County’s impact fee program. Was the payment of the fee alone sufficient to mitigate impacts without regard to site-specific considerations?

The trial court upheld the approval of the MND and the Project approval, but the Third District Court of Appeal reversed, holding as follows:

  1. Although the project had been constructed during the pendency of the litigation, the lawsuit and related issues were not moot.
  2. This particular Ordinance did not presumptively establish full mitigation for any specific project given that the Ordinance did not undergo any independent environmental review. The evidence in the record was the General Plan and related EIR and impact fee ordinance did not displace consideration of site-specific impacts as they related to species. Moreover, the General Plan EIR recognized that impacts to these sensitive species would not be mitigated to a less than significant level, and species impact was subject to a statement of overriding considerations. The General Plan called for full mitigation, but the relevant General Plan implementation tool, the Integrated Natural Resources Management Plan, had never been adopted. For an in-lieu fee system to completely satisfy the duty to mitigate the fee program must be evaluated by CEQA or the in-lieu fees or other mitigation must be evaluated on a project-specific basis.
  3. The County violated its own mitigation strategy by failing to conduct annual reviews of the fee amount and efficacy of the Fee Program. This rendered the Fee Program unsound. Lack of County follow through undermined the County’s argument that payment of the fee constituted full mitigation.
  4. There was substantial evidence in the record to support a fair argument that the Project would have a significant effect on rare plants; therefore, an EIR was required.

So, are the days of mitigating significant impacts with impact fees really over?  We don’t think so. This court specifically considered the special presumption applicable to species contained in CEQA Guidelines section 15065(a)(1), which calls for a mandatory finding of significance (e.g., an EIR must be prepared) when there is substantial evidence that a project “has the potential to threaten to eliminate a plant or … substantially reduce the number or restrict the range of an endangered, rare or threatened species.” Notably, there is no similar mandatory finding of significance concerning other types of impacts commonly mitigated through fees for improvements such as traffic and other public infrastructure.

In this case, there was sufficient evidence via the unrefuted written and verbal testimony in the record to require the preparation of an EIR.  No previous environmental review of the project or its impacts on the endangered and threatened species had been conducted.  Coupled with the mandatory CEQA finding of significance, an EIR was likely inescapable. With respect to mitigation fees for other purposes, this case stands for the proposition that the existence of a fee program, adopted without CEQA coverage, does not create a conclusive presumption of full mitigation of all effects. Instead, conclusions of mitigation can still be debated on a case-by-case basis. For more information on impact fees as mitigation see Impact Fee Programs as Effective Tools for CEQA Mitigation.

Katherine J. Hart is a senior associate at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.